This is the second year of reporting on the LDI portfolio, whereas reporting in respect of the other assets has been undertaken for a longer period. Consequently, figures have been shown separately for the LDI holdings in the metrics section below, so that the Trustee can continue to track changes in emissions attributable to the other assets on a consistent basis from one year to the next. The assets excluded from reporting this year are the Scheme’s secure income holdings, asset-backed contribution arrangements and AVCs. These assets have not been included due to practical issues around the availability and quality of relevant data. The Trustee will continue to review whether data in respect of these assets should be published in future reporting.
Governance
Documentation of the Trustee’s policies and their implementation
The Trustee maintains a Statement of Investment Principles (‘SIP’), which sets out the Scheme’s policies on financial risks, including those related to climate change and responsible ownership. The Trustee manages climate risk according to financial materiality in the context of the Scheme’s expected lifetime and also against the other risks and opportunities with which it is presented.
The Trustee also publishes an annual Implementation Statement used to review its approach to responsible ownership and engagement with investee companies.
As part of the process of preparing the Implementation Statement, the Trustee considers the asset managers’ approaches to stewardship, including data on voting and engagement, as well as engagement case studies over a 12-month period. In particular, the statement includes examples of significant votes and engagements related to climate issues over the reporting period.
Delegation
The management of climate-related risk with respect to specific securities is delegated to the Scheme’s investment managers, who are all third-party firms independent of the Trustee and its sponsoring employers.
Monitoring the Scheme’s investment managers and consultant
The Investment Sub-Committee (‘ISC’) of the Trustee meets at least quarterly and receives performance monitoring reports from its investment consultant that include ratings providing a view on the ability of the Scheme’s investment managers to integrate climate risk management and other factors associated with environmental, social or governance (‘ESG’) issues into investment processes.
The ratings also consider how active ownership activities undertaken by asset managers, including voting and engagement on climate-related issues, are used as part of investment processes.
In monitoring the Scheme’s managers, the ISC takes account of the fact that ESG issues are more relevant for some parts of the portfolio. For example, ESG considerations do not currently play a significant role in the selection of gilts within the LDI portfolio but may have a greater influence on the selection of equities within actively managed target return holdings. On an annual basis, the ISC also evaluates the performance of its appointed investment consultant in line with agreed objectives. The ISC is comfortable with the consultant’s ability to advise on climate- related risks and opportunities, having considered the approach the consultant takes to determine ESG ratings for the investment managers, as well as knowing that the consultant is a signatory to the UNPRI and the UK Stewardship Code.
UTC UK Pension Scheme | TCFD Report | 31 December 2025
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